PSNC 2014: Financial Wellness in the Workplace

When it comes to financial matters, employers should assume procrastination, inertia and a real lack of knowledge from employees, according to Janet Ganong, a financial consultant at the Kieckhefer Group.

Incorporating automatic features into retirement plan design sets
participants on a better path for financial security in retirement and frees plan
sponsors and advisers up to talk about other subjects to help improve overall
financial success for employees, Ganong
said, speaking
to attendees of the 2014 PLANSPONSOR National Conference in Chicago. “Financially successful employees are happier
and more productive,” she added.

Matt
Gulseth, a partner at Channel Financial, added that employees want someone to do
it for them, and plan sponsors must accept they will have an uphill battle with
education. “If you are not doing auto features to the max, you’re wasting time
on financial wellness,” he contended. He
suggested plan sponsors use plan design to “legislate” good outcomes before they
consider a financial wellness program.

Gulseth added that when
it comes to financial wellness education, plan sponsors should think about what
they remember from high school biology—it’s probably not much. They should
determine how to deliver “just-in-time” messages—for example, a seminar about
mortgages for participants who are ready to get a mortgage. Messages should be
in easy, “rules-of-thumb” formats, he recommended.

“Financial
wellness covers all the other stuff outside of the retirement plan—estate
planning, insurance, etc.” he said. “Meet folks on the decision points they
face in their lives.”

Gulseth
also contended that part of a workplace financial wellness program is deciding
whether you want to transition employees into an income solution. “If you don’t
help with those very complicated choices, they’ll be spinning in the wind,” he
said, adding that CEOs want employees who want to work for them, not employees
who work for them because they have to or need to. They need engaged
employees, and if employees have other things on their minds, they will be less
productive.

According
to Ganong, one of the big benefits of a financial wellness program to plan
sponsors is that helping employees retire will keep health care costs down. In
addition, it allows employee mobility within the firm—there’s no stagnation of
younger folks’ careers or ideas.

One point made by
Gulseth: There’s only so many people whose behavior you can change. “When does
education become brow-beating?” he queried, adding that plan sponsors should
see financial education not as a behavioral change mechanism, but as an
issue-addressing mechanism.